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The Importance of Contracts by Lisa Kroese

Aug. 17, 2015 | SBO Editor
Contracts and written agreements are key documents to ensure success.

contracts are important

By Lisa Kroese

As small business owners, our clients will expect a lot from us and will ask a lot from us. Sometimes no matter how hard we work, or how diplomatic we are, or how great our work is, someone is just not pleased and we may be faced with threats of bad reviews or even lawsuits.

Contracts Are Key

Great contracts or written agreements set up in advance of your work can keep you out of trouble. Here’s why:

1. Contracts define the relationships that both parties have in any given business transaction – whether you are hiring an independent contractor, an employee or planning to complete work for a client. Contracts ensure that both parties know what is expected of them.

2. Answers questions – Going over a contract before signing it answers questions at the the start and can ensure that everyone is on the same page. A contract can clarify that both parties knew in advance of the agreement what was expected of them before any work began.

3. Establish consequences – Contracts can outline what takes place when one party doesn’t do what was expected.

4. Prevents alterations – A contract can specify that it can’t be altered unless both parties agree in writing, this protects you from claims from a client stating they left you written instructions or verbal messages that they believed were alterations to the contract.

5. Save costs – Contracts can also save you legal costs if something does go wrong, you can state that all parties agree to professional mediation, which is an alternative to a court lawsuit. It is faster and cheaper than a court case. You can even specify that the losing party would pay the legal fees of both sides, this increases the risks associated with filing a suit and can help make a court case less likely.

Don’t get caught in the crossfire, have your contracts in order and make sure you don’t veer off course during your work. When issues come up, remind your clients of the contract agreement you have!

About the Author

Lisa Kroese owns and operates Expert Estates LLC and EstateFusion.com She is an estate liquidator and appraiser in California and she has appraised and helped sell millions of dollars worth of personal property. Lisa provides estate liquidators nationwide with start up consulting, coaching and other support services. Her book, “The Estate Sale Start Up Kit” is available on Amazon. She also blogs at EstateMama.com.

**Original article can be read here.

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